Entity information:
12.
INCOME TAXES
 
Provision for income taxes consisted of the following for the periods indicated (in thousands):
 
 
Year Ended March 31
  
 
2017
  
2016
  
2015
  
Current
  
$
284
    
$
251
    
$
16
  
Deferred
    
3,103
      
3,175
      
2,140
  
Total
  
$
3,387
    
$
3,426
    
$
2,156
  
 
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows at the dates indicated (in thousands):
 
   
March 31, 2017
    
March 31, 2016
  
Deferred tax assets:
            
Deferred compensation
  
$
150
    
$
128
  
Allowance for loan losses
    
3,875
      
3,624
  
Accrued expenses
    
217
      
199
  
Accumulated depreciation and amortization
    
1,017
      
908
  
Deferred gain on sale
    
361
      
418
  
Net operating loss carryforwards
    
1,134
      
4,849
  
Purchase accounting
    
228
      
-
  
REO expense
    
-
      
49
  
Net unrealized loss on investment securities available for sale
    
929
      
-
  
AMT credit
    
471
      
229
  
Other
    
332
      
350
  
Total deferred tax assets
    
8,714
      
10,754
  
 
Deferred tax liabilities:
            
FHLB stock dividend
    
(143
)
    
(143
)
Net unrealized gain on investment securities available for sale
    
-
      
(596
)
Prepaid expenses
    
(158
)
    
(172
)
Loan fees/costs
    
(803
)
    
(654
)
Total deferred tax liabilities
    
(1,104
)
    
(1,565
)
Deferred tax assets, net
  
$
7,610
    
$
9,189
  
 
A reconciliation of the Company's effective income tax rate with the federal statutory tax rate is as follows for the periods indicated:
   
Year Ended March 31,
  
   
2017
    
2016
    
2015
  
Statutory federal income tax rate
  
34.0
%
  
34.0
%
  
34.0
%
State and local income tax rate
  
1.5
    
1.5
    
1.6
  
ESOP market value adjustment
  
(0.1
)
  
(0.1
)
  
-
  
BOLI
  
(3.8
)
  
(2.8
)
  
(3.8
)
Other, net
  
(0.2
)
  
2.2
    
0.4
  
Effective federal income tax rate
  
31.4
%
  
34.8
%
  
32.2
%
 
The tax effects of certain tax benefits related to stock options are recorded directly to shareholders' equity. The Bank's retained earnings at both March 31, 2017 and 2016 include a base year allowance for loan losses, which amounted to $2.2 million, for which no federal income tax liability has been recognized. The related unrecognized deferred tax liability at March 31, 2017 and 2016 was $781,000. This represents the balance of the allowance for loan losses created for tax purposes as of December 31, 1987. These amounts are subject to recapture in the unlikely event that the Company's banking subsidiaries (1) make distributions in excess of current and accumulated earnings and profits, as calculated for federal tax purposes, (2) redeem their stock, or (3) liquidate. Management does not expect this temporary difference to reverse in the foreseeable future. At March 31, 2017, the Company had total deferred tax assets of $1.1 million for federal and state net operating loss carryforwards which will expire in years 2032 through 2034.
 
At March 31, 2017 and 2016, the Company had no unrecognized tax benefits or uncertain tax positions. In addition, the Company had no accrued interest or penalties as of March 31, 2017 or 2016. It is the Company's policy to recognize potential accrued interest and penalties as a component provision for income taxes. The Company is subject to U.S. federal and State of Oregon income taxes. The years 2014 to 2017 remain open to examination for federal income taxes, and the years 2013 to 2017 remain open to State of Oregon examination.