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Income Taxes
12 Months Ended
Mar. 31, 2013
INCOME TAXES [Abstract]  
Income Tax Disclosure [Text Block]
INCOME TAXES

The components of income tax expense (benefit) for the years ended March 31 are as follow:

$ in thousands
 
2013
 
2012
 
2011
Federal income tax expense (benefit):
 
 
 
 
 
 
    Current
 
$
149

 
$
(1,067
)
 
$
751

    Deferred
 
(1,024
)
 
(1,080
)
 
14,106

    Valuation allowance
 
1,024

 
1,080

 

 
 
149

 
(1,067
)
 
14,857

 
 
 
 
 
 
 
State and local income tax expense (benefit):
 
 
 
 
 
 
    Current
 
179

 
106

 
170

    Deferred
 
229

 
(1,755
)
 
691

    Valuation allowance
 
(229
)
 
1,755

 

 
 
179

 
106

 
861

 
 
 
 
 
 
 
Total income tax expense (benefit)
 
$
328

 
$
(961
)
 
$
15,718



The following is a reconciliation of the expected Federal income tax rate to the consolidated effective tax rate for the years ended March 31:

$ in thousands
2013
 
 
 
2012
 
 
 
2011
 
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Statutory Federal income tax expense (benefit)
$
337

 
34.0
 %
 
$
(8,285
)
 
34.0
 %
 
$
(8,095
)
 
34.0
 %
State and local income taxes, net of
    Federal tax benefit
49

 
4.9
 %
 
(1,541
)
 
6.3
 %
 
(293
)
 
1.2
 %
General business credit
(32
)
 
(3.3
)%
 
(32
)
 
0.1
 %
 
(32
)
 
0.1
 %
Tax gain on sale of NMTC

 
 %
 

 
 %
 
4,905

 
(20.6
)%
Valuation Allowance
795

 
80.3
 %
 
2,835

 
(11.6
)%
 
18,870

 
(79.3
)%
Write off DTA due to Section 382 limitation
(1,363
)
 
(137.7
)%
 
6,089

 
(25.0
)%
 

 
 %
True-ups/Adjustments
524

 
53.1
 %
 

 
 %
 

 
 %
Other
18

 
1.8
 %
 
(27
)
 
0.1
 %
 
363

 
(1.5
)%
Total income tax expense (benefit)
328

 
33.1
 %
 
(961
)
 
3.9
 %
 
15,718

 
(66.0
)%


Carver Federal's operating results includes a $0.3 million tax expense for the fiscal year ended March 31, 2013. For the fiscal year ended March 31, 2012, the total income tax benefit of $1.0 million included a $2.8 million valuation allowance taken on the Bank's deferred tax assets. For the fiscal year ended March 31, 2011, the total income tax expense of $15.7 million included an $18.9 million valuation allowance taken on the Bank's deferred tax assets.

Tax effects of existing temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are included in other assets at March 31 as follows:

$ in thousands
2013
 
2012
Deferred Tax Assets:
 
 
 
Allowance for loan losses
$
3,318

 
$
7,215

Deferred loan costs, net
366

 
469

Non-accrual loan interest
2,265

 
2,911

Purchase accounting adjustment
144

 
170

Net operating loss carryforward
10,289

 
6,572

New markets tax credit
3,274

 
1,879

Depreciation
701

 
561

Minimum pension liability
110

 
110

Market value adjustment on HFS loans
1,608

 
1,608

Other
601

 
570

Total Deferred Tax Assets
22,676

 
22,065

Deferred Tax Liabilities:
 
 
 
Income from affiliate
176

 
361

Unrealized gain on available-for-sale securities
394

 
139

Total Deferred Tax Liabilities
570

 
500

 
 
 
 
Valuation Allowance
$
(22,106
)
 
$
(21,565
)
 
 
 
 
Net Deferred Tax Assets
$

 
$




On June 29, 2011, the Company raised $55.0 million of equity. The capital raise triggered a change in control under Section 382 of the Internal Revenue Code. Generally, Section 382 limits the utilization of an entity's net operating loss carryforwards, general business credits, and recognized built-in losses upon a change in ownership. The Company expects to be subject to an annual limitation of approximately $0.9 million. The Company has a net deferred tax asset (“DTA”) of approximately $26.8 million. Based on management's calculations, the Section 382 limitation has resulted in previous reductions of the deferred tax asset of $4.7 million. A full valuation allowance for the remaining net deferred tax asset of $22.1 million has been recorded.

At March 31, 2013, the Company had net operating carryforwards for federal purposes of approximately $21.9 million, for state purposes of approximately $37.1 million and for city purposes of approximately $32.0 million which are available to offset future federal, state and city income and which expire over varying periods from March 2028 through March 2033.

The Company has no uncertain tax positions. The Company and its subsidiaries are subject to federal, New York State and New York City income taxation. The Company is no longer subject to examination by taxing authorities for years before March 31, 2008. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination; with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.