Note 8 - Income Taxes
The components of income taxes are summarized as follows:
|
|
|
Years Ended March 31, |
|
|||||||||
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
|
|
|
(In Thousands) |
|
|||||||||
|
Current tax expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income |
|
$ |
2,314 |
|
|
$ |
2,863 |
|
|
$ |
3,226 |
|
|
State income |
|
|
500 |
|
|
|
574 |
|
|
|
612 |
|
|
Total current income tax expense |
|
|
2,814 |
|
|
|
3,437 |
|
|
|
3,838 |
|
|
Deferred tax (benefit) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income |
|
|
(477 |
) |
|
|
(703 |
) |
|
|
183 |
|
|
State income |
|
|
(171 |
) |
|
|
(192 |
) |
|
|
43 |
|
|
Total deferred income tax (benefit) expense |
|
|
(648 |
) |
|
|
(895 |
) |
|
|
226 |
|
|
Total Income Tax Expense |
|
$ |
2,166 |
|
|
$ |
2,542 |
|
|
$ |
4,064 |
|
The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 34% to income before income taxes:
|
|
|
Years Ended March 31, |
|
|||||||||
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
|
|
|
(Dollars In Thousands) |
|
|||||||||
|
Federal income tax at the statutory rate |
|
$ |
2,342 |
|
|
$ |
2,701 |
|
|
$ |
4,290 |
|
|
Increase (decrease) in income taxes resulting from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
State income tax, net of federal income tax effect |
|
|
217 |
|
|
|
252 |
|
|
|
433 |
|
|
Bank owned life insurance income |
|
|
(529 |
) |
|
|
(528 |
) |
|
|
(710 |
) |
|
Other, net |
|
|
136 |
|
|
|
117 |
|
|
|
51 |
|
|
Total Income Tax Expense |
|
$ |
2,166 |
|
|
$ |
2,542 |
|
|
$ |
4,064 |
|
|
Effective income tax rate |
|
|
31.5 |
% |
|
|
32.0 |
% |
|
|
32.2 |
% |
Deferred tax assets and liabilities consisted of the following:
|
|
|
March 31, |
|
|||||
|
|
|
2017 |
|
|
2016 |
|
||
|
|
|
(In Thousands) |
|
|||||
|
Deferred income tax assets: |
|
|
|
|
|
|
|
|
|
Pension costs |
|
$ |
840 |
|
|
$ |
1,047 |
|
|
Allowance for loan losses |
|
|
2,492 |
|
|
|
1,781 |
|
|
Depreciation |
|
|
246 |
|
|
|
322 |
|
|
Non-qualified benefit plans |
|
|
319 |
|
|
|
237 |
|
|
Employee Stock Ownership Plan |
|
|
367 |
|
|
|
377 |
|
|
Supplemental Executive Retirement Plan |
|
|
257 |
|
|
|
179 |
|
|
Other benefit plans |
|
|
348 |
|
|
|
295 |
|
|
Net unrealized loss on securities available for sale |
|
|
15 |
|
|
|
— |
|
|
Other |
|
|
340 |
|
|
|
323 |
|
|
Total Deferred Tax Assets |
|
|
5,224 |
|
|
|
4,561 |
|
|
Deferred income tax liabilities: |
|
|
|
|
|
|
|
|
|
Net unrealized gain on securities available for sale |
|
|
— |
|
|
|
(54 |
) |
|
Post-retirement benefits and healthcare obligations |
|
|
(37 |
) |
|
|
(65 |
) |
|
Net Deferred Tax Asset Included in Other Assets |
|
$ |
5,187 |
|
|
$ |
4,442 |
|
Note 8 - Income Taxes (Continued)
Retained earnings at March 31, 2017 and 2016 include approximately $6.4 million of tax bad debt deductions for which deferred taxes have not been provided. Reduction of such amount for purposes other than bad debt losses, including non-dividend distributions, will result in income for tax purposes only, and will be subject to income tax at the then current rate. The Company does not intend to make non-dividend distributions that would result in a recapture of any portion of its bad debt reserves.